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TMI Blog2010 (7) TMI 1025X X X X Extracts X X X X X X X X Extracts X X X X ..... e appeal of the revenue is dismised. X X X X Extracts X X X X X X X X Extracts X X X X ..... rious legal pronouncements and also the ratio laid down by the Hon'ble ITAT, Kolkata, the addition made by the AO on account of deposits in undisclosed bank accounts is directed to be restricted to the combined peak credit of ₹ 22,80,206.63. Ground No. 2 is partly allowed." Aggrieved by the said order, now the revenue is in appeal before us. 3. At the time of hearing the Ld. DR relied on the order of the AO and submitted that the Ld. CIT(A)has erred in allowing the assesee the benefit of telescoping peak credit. The peak credit as worked out by the assessee and subsequently allowed by the Ld. CIT(a) represent the consolidated amount of deposits and withdrawals of the two undisclosed bank accounts amalgamated together. But as suggeste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn. During the course of assessment proceedings, the appellant could offer no satisfactory explanation as regards the nature and source of the deposits in the bank accounts. The AO therefore added the entire deposits in both the bank accounts as income from undisclosed sources. The addition was made by the AO primarily because the appellant could offer no explanation before him. As the language used by the AO in the assessment order suggests, since the appellant failed to discharge his onus in explaining the source of credits appearing in the bank accounts, the AO simply "presumed" that all credits represented undisclosed income of the appellant. It was basically the absence of any explanation from the appellant that prompted the AO to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redit worked out on the basis of amalgamated deposits and withdrawals of all the undisclosed bank accounts is the only correct method for determining the undisclosed income. I have considered the bank accounts and found that there are various credits as well as withdrawals in the bank accounts. It is an admitted fact that the bank accounts are undisclosed and therefore the deposits in the bank accounts are unexplained investment of the appellant. But, the amount invested at one point of time was withdrawn subsequently and was therefore, available for further deposits. There is no material on record to show that the amount withdrawn has been utilized by the appellant for any expenses or for any investment. And therefore, the peak credit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, the peak credit of ₹ 7,50,975/- covers the total deposit and withdrawal made by the assessee in the said bank account. Making the addition of aggregate deposits in the bank account without giving the benefit of withdrawals made by the assessee from time to time is not justified The Ld ClT(A) has rightly treated the peak balance of ₹ 7,50,975/- as an unexplained investment made by the assessee in the nature of credits in the said bank account and, therefore, the addition of ₹ 7,50,975/- is only called for. The order of the Ld. CIT(A) is therefore, upheld" In the case of ACIT vs Praveen Kumar Agarwal [IT (SS) A No. 61 & 74/Kol/2003 ], the Hon'ble ITAT, 'C' Bench, Kolkata upheld the combined peak credit method. In this c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther related entries to enable him to work as an entry operator. The Ld. Counsel has pointed out that the Id. CIT(A) has given a specific observation after perusing the relevant seized material that entries contained in such seized material were nothing but entries made by the assessee for carrying out his activity as an entry operator and for this purpose only taxing of peak credit could have been the best option which has also been done by the Ld. CIT(A). In support of his contention, he tans relied on the decision of ITAT, Kolkata in I.T.(SS.)A. No 190/KoJ/2003 dated 11.10.2004 in case of AC1T vs Lpknath Gupta, wherein this Tribunal has held that in ease every deposit is followed by a withdrawal then the peak credit only covers the total ..... X X X X Extracts X X X X X X X X Extracts X X X X
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